Garner pledges a new Baghdad government within days

The American administrator of Iraq, Jay Garner, said yesterday the formation of a post-Saddam government would start next week. But he failed to say who would serving on it or how they would be chosen.

There also appeared to be confusion over what would happen if an Islamic government was voted to power in a future election.

While insisting that America and Britain wanted to let the people of Iraq decide their own fate, General Garner maintained that an Islamic government was incompatible with democratic principles.

His British deputy, Major- General Tim Cross, said Iraqis must be allowed to vent their fury after decades of repression. But he added that he did not want to see this lead to a fundamentalist regime similar to neighbouring Iran. He insisted that the Shia majority in the country would not want this either. "I genuinely believe that many of these people want to be part of a democratic Iraq," he said.

But the assertions of General Garner and Maj-Gen Cross were made against a background of rising religious and nationalistic fervour, highlighted in the million-strong Shia pilgrimage at Karbala, which ended with demands for the establishment of an Islamist state and threats of a jihad against the "American occupiers".

Islamic administrations have already been established in a series of towns and villages in the Shia heartland of the south and east, with clerics stepping into the vacuum left by the collapse of the regime. The Shia religious authority, the Hawza, based in the holy city of Najaf, claims it is co-ordinating the takeovers.

America has claimed that Shia Iran is encouraging the militancy of its co-religionists, although this was strongly denied by the Iranian government. General Garner declared that "the coalition will not accept such interference", without elaborating on what kind of action was envisaged. The retired general held talks yesterday with 60 Baghdad academics and community leaders on Iraq's future. Iraqis who attended the meeting, which lasted about an hour, said they had pressed General Garner to restore essential services and law and order as quickly as possible to the battered capital. "He said, 'We are trying to do our best'," reported one of the participants, the writer and retired English teacher Youarash Haidoua. "We need security, we need peace, we need law." An American official described the tone of the meeting as "spirited and sometimes emotional".

General Garner said: "I think you'll begin to see the governmental process start next week, by the end of next week. It will have Iraqi faces on it. It will be governed by the Iraqis."

The American administrator urged government employees to return to work. Asked how the process of "deBaathification" would be carried out, he said "cronies of Saddam" would become targets and a list of suspects prepared by the Pentagon would be consulted.

He denied that the American government was backing Ahmad Chalabi, the head of the Iraqi National Congress, who was flown to Iraq on board an American military aircraft and has stayed behind the iron gates of Baghdad's Hunting Club, guarded by American forces.

Maj-Gen Cross insisted there was no large-scale humanitarian crisis in Iraq, despite warnings from aid agencies that a disaster was likely unless urgent supplies of food and medicine were delivered.